Realtors say RBI decision to cut key rates, give 3-month moratorium to boost liquidity, ease debt pressure

The RBI's decision to cut key rates and give three-month moratorium on all term loans will boost liquidity and ease debt pressure, provided banks pass on these benefits to customers quickly, according to property developers and consultants.

The RBI cut repo rate to 4.4 percent and reduced the cash reserve ratio maintained by the bank by 100 basis points. The reverse repo rate was cut by 90 bps to 4 percent.

Commenting on the development, Jaxay Shah, Chairman, CREDAI  said, "The economy is going through hard times. The decisions by RBI Governor today is a much-awaited comprehensive package to ease the burden of all financial classes across the nation. We are assuming that the moratorium covers all home loans, auto loans and personal loans of any nature. It's very important that the hard working tax paying middle income segment of our society is provided this flexibility," he added.

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Niranjan Hiranandani, President, NAREDCO said the RBI's move to pump fresh liquidity in the system will certainly help to mitigate the stressed cash flow and debt pressure in the economic system. The success to masterstroke announcement by RBI will be in quick transmission of these liquidity tools down the line to uplift the appetite among the India Inc to notch up the economic revival," he added.

Anuj Puri, Chairman, Anarock  said RBI's move will push credit flow into all industries reeling under the impact of the coronavirus. "Given this time period, RBI will ensure that the benefit of the rate cut is directly passed on to actual consumers, which could eventually translate into more home loan takers," he said. The moratorium of three months of EMIs on all outstanding loans will be  a major relief to all concerned stakeholders. "All in all, this big-bang announcement by the RBI will benefit all industries, and is undoubtedly the most convincing intervention yet to tame a major economic crisis in the country," Puri said.

Anshuman Magazine, Chairman and CEO, CBRE- India, South East Asia, Middle East & Africa said, "RBI is in a mission mode to nurture the market, preserve financial stability and the timing here is crucial."The decision to defer installments of all term loans by three months will provide the necessary support to homebuyers as well, he added.

Ramesh Nair,  CEO and Country Head, JLL India said the reduction in key interest rates will encourage banks to resort to enhanced lending to productive sectors of the economy at a time when growth of credit is slowing down. "It is important for immediate transmission of these rate cuts to the home buyer which will boost consumer sentiment," he added. The injected liquidity of Rs 3.74 lakh crore along with the three-month moratorium on all term loans by financial institutions will alleviate short-term liquidity concerns and help developers as well as home buyers survive in these uncertain times, Nair said.

File image of RBI governor Shaktikanta Das. Reuters

Shishir Baijal, Chairman and Managing Director, Knight Frank India  said the apex bank has checked all the required boxes of rate cut, liquidity infusion and moratorium. "These steps will help the economy to stay stable despite the lockdown and economic disruption," he said.

Dhruv Agarwala, CEO of PropTiger and Housing.com, said, "This will go a long way in reducing the massive pain being felt in all parts of the economy and especially in the rate sensitive real estate sector. The RBI has shown its decisive intent to mitigate what could have been a severe economic fallout of the coronavirus pandemic."

Mayur Shah, Managing Director, Marathon Group, "the RBI Policy announcement today has come with a huge sigh of relief. The decisions made on reducing the repo rate along with term loan and Interest deferment for 3 months under this liquidity crisis is a big relief to the SME and businesses. The government is making substantial liquidity infusions at the time of the pandemic situation."

Manoj Gaur, Managing Director, Gaurs Group said the home loan rates should fall by 90-110 basis point. "For the sake of Indian economy, RBI must ensure proper transmission."

Farshid Cooper, MD, Spenta Corporation said, the 3-month moratorium on the EMI’s is set to be a 'big relief' for borrowers and they can also safeguard their credit score. "The realty sector has been observing a slowdown with limited sales and new launches."

Lincoln Bennet Rodrigues, Founder and Chairman, Bennet & Bernard Group, luxury real estate developer said, "the 3-month moratorium on payments of term loan instalments (EMI) and interest on working capital will give much-desired relief for individuals and now it needs quick transmission for maximum impact. This will reduce the borrowing cost for the home-seeker significantly and have a positive impact on real estate. Banks should do all they can to keep credit flowing now."

Ram Raheja, Director and Head-Director, Design, S Raheja Realty said, the 75 bps repo rate cut and reverse repo being brought down to 4 percent by the Reserve Bank of India provides much-needed relief for the economy. "This cut in reverse repo should incentivise the banks to lend more. Additionally, `3.74 lk cr liquidity will be injected into the system via different measures by the RBI and this will help arrest the financial stress across sectors."

Rahul Grover-CEO, SECCPL (Sai Estate Consultants Chembur Pvt Ltd). said, "RBIs move to restart the loan EMI payments only once the moratorium time period expires is a positive step and provides a much-needed relief especially to the self-employed individuals."

Manju Yagnik, Vice Chairperson, Nahar Group and Vice President NAREDCO (Maharashtra) said "RBI's move is very timely and in sync with funds allocation to help 3.5 crore building and construction works all over the country.  Earlier stamp-duty reduction by 1 percent by Maharashtra Government was another such step which would ease woes of the real estate sector. I appreciate the timely stance taken by the RBI with today’s announcement. "

RK Arora , Chairman, Supertech said the move would provide momentum to the property market and boost the economy.

Nayan Raheja, Executive Director, Raheja Developers said the interest on home loans may fall down to around 7 percent, which augurs well for the real estate sector.

Rohit Gera, MD, Gera Developments, said, "The reduction in interest rates will ease the burden on individuals and businesses as would the moratorium."

Avneesh Sood, Director Eros Group, hoped that the banks would pass on the benefit, lowering the interest cost of both developers and home buyers.

Ashok Mohanani, Chairman, Ekta World said, "Today's announcement infused some assurance in the mind of the panicked citizens that the economy will revive back in the short run."

Vikas Jain, CEO, Labdhi Lifestyle said the EMI moratorium will relieve the mental burden on the middle-class consumer as the end of the month is nearing soon. "Reduced home loan interest will help the realty sector though we do not see any movement happening in the near future. We thank the Government of India for taking such timely measures to support the economy in such trying times," he said.

Ashish Bhutani, CEO, Bhutani Infra said, "From reduction of rates to infusion of liquidity to moratorium on loan repayment, the measures will help both individuals & organizations to cope up with the current situation."

Kamal Khetan, Chairman and Managing Director, Sunteck Realty said, "the moratorium of 3 months on the term loans including home loans by RBI would provide relief for the real estate sector to focus more on the operational requirement and recalibrate the business strategies. The relief would improve cash flow and prevent further downslide from hereon."

Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory said, "We believe that the banks will finally be passing the benefits of the current & previous rate cuts to the customers. This will reduce the borrowing cost for the home-seeker significantly and have a positive impact on real estate."

Ankush Kaul, President (Sales & Marketing), Ambience group, said the moratorium on EMIs will help in managing through the current crisis.

Rohit Poddar, MD, Poddar Housing said, "We welcome these measures as without them the economy will go into deflation."

Prateek Mittal, ED, Sushma Group said the home loan rates will fall sharply, which will boost housing demand when situation normalises.

Ashish Sarin, CEO, AlphaCorp, this is a major step to improve liquidity conditions, cheer growth and safeguard financial stability, said Ashish Sarin, CEO, AlphaCorp.

Honeyy Katiyal, founder, Investors Clinic, termed these steps as "the need of the hour" to boost the realty sector and overall economy.

Anuj Khetan, Director, Vijay Khetan Group, said the "struggling real estate sector and the home buyers trapped in COVID-19 worries, have been relieved a bit with the RBI's measures. While the repo, reverse repo and CRR cuts would increase lending powers of the banks to the businesses, a suggested moratorium of home loan instalments and interests thereon, which the banks should implement with immediate effect, will ease people from financial burdens. It will support our business continuity plans, as well, because more liquidity will help the homebuyers schedule their buying plans in the short run."

Shailesh Puranik, Managing Director, Puranik Builders, said during such trying times, the RBI has been "sensitive to the needs and demands to keep the Indian economy afloat. Not only has the RBI ensured to massively cut the repo rate by 75 basis points, but also lowering of Cash Reserve Ratio to 3 percent, announcing the moratorium period on all loans among other measures will provide Indian businesses to tide over these difficult times in the next few months.”

Rajan Bandelkar, President, NAREDCO Maharashtra, said a moratorium of three months on repayment of loans and interest thereon, with a further assurance of not classifying such assets for downgrading will give relief to the homebuyers and businesses. "It will ease them from financial burdens and help them plan financial priorities better in this challenging time. The RBI has also assured that the banking system was sound and there was no need to be anxious about it. But, all this has highlighted a fact that the real estate is a safe asset class, as it is a physical one. This is evident when cash flows and liquidity have impacted all other asset classes severely."

Ashish R Puravankara, MD, Puravankara Ltd said, "we hope all the financial institutions will transfer these benefits to end-user at the earliest and the desired result can be achieved to put the economy on the path of recovery."

JC Sharma, VC & MD, Sobha Limited, said, "the rate cut is further expected to complement other monetary measures such as the deferring of working capital interest, reduction of CRR for all banks by 100 basis points should address liquidity challenges faced by NBFCs and banks by easing investment inflows into the country. These accommodative measures will ensure that adequate liquidity is available to all constituents and COVID-19 related liquidity constraints are eased.: